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HomeMy WebLinkAbout2013-05-07 Business and Economic Development Committee Minutes BUSINESS & ECONOMIC DEVELOPMENT COMMITTEE Tuesday, May 7, 2013, 5:15 pm City Council Chambers Minutes Councilors: Chair Sprague, Joe Baldacci, Pat Blanchette, Pauline Civiello, Dave Nealley Staff: Rosie Vanadestine, Jeff Wallace, Norm Heitmann, Art Morgan, David Gould, Tanya Periera The meeting was called to order by Chair Sprague at 5:15 p.m. REGULAR AGENDA 1. Public Hearing – Amount of Federal Community Development Block Grant Funds expected to be available for the period July 1, 2013 – June 30, 2014 and the Eligible Uses of Community Development Funds Chair Sprague moved to opened the Public Hearing at 5:15 pm. Joe Baldacci seconded the motion. All in favor, motion carried. Rosie Vanadestine reviewed the projected amount of funds available for the upcoming year and the proposed budgeted items for recommendation to the full Council. A 5% reduction is being expected which would make the grant amount $708,870. A projected amount of program income funds of $175,000 is also being budgeted for a total of $883,870. The proposed activities and budgets for each include: Business Development Assistance and the Façade Program = $100,000, Demolition and Clearance = $45,000, Acquisition = $55,000, Homeownership Assistance = $25,000, Residential Property Rehabilitation and administration = $280,424, Local Neighborhood Stabilization Program = $125,000, Program Administration = $176,774, Neighborhood Streets & Sidewalks = $71,672 and Property Disposition = $5,000. Councilor Baldacci asked if there are any excess funds that could be programmed to streets and sidewalks. Councilor Civiello asked for a breakdown of acquisition and demolition. Vanadestine explained that $45,000 for demolition, and clearance was calculated at 3 properties @ $15,000 each. Acquisition was budgeted @ $55,000. For single-family rehab it was calculated at 10 homes @$12,000 each and 3 multi-family homes at $30,000 each for a total of $210,000. Vanadestine explained that the West Side Village strategy area is a focus point for the City and will be considered a priority area for funds in Business Development/Façade, Demolition & Acquisition, Homeownership Assistance, Residential Property Rehabilitation and streets and sidewalks. However, the funds can be spent city-wide if we do not have the opportunity to spend it in the strategy area, as long as it meets the national objectives. Councilor Blanchette asked what happens to the unused funds and where do they go. Vanadestine explained that we have typically operated on the three-year cycle and carry over the funding each year for projects that may have been delayed. If there is money left over after the projects are completed, those funds can be reallocated to other budget areas that have 2 been submitted to HUD. If it is for a new project that has not been submitted to HUD as part of our plan we would have to do an amendment process to add it. Councilors Nealley and Baldacci indicated that they would like to use as much of the funds city- wide as possible. Chair Sprague commented that the new Homeowner Assistance use could jeopardize the ability of the homeowner as the down payment is considered a benchmark. He was concerned that we might be putting people into homes that they may not really be able to afford and end up losing. Vanadestine explained that we do an internal underwriting similar to the bank and our guidelines require that the mortgage, property taxes and insurance are no more than 25-30% of household income. We also review debt to income ratios as well. These measures are in place to ensure that it will be successful. There were no public comments. Chair Sprague moved to exit the Public Hearing at 5:30 pm. Councilor Nealley seconded the motion. All in favor, motion carried. Councilor Baldacci moved to approve the projected amount of $883,870 and the uses and budgeted amounts, as presented. Councilor Nealley seconded the motion. All in favor, motion carried. 2. Residential Rehabilitation Loan – 174 Essex Street Jeff Wallace gave an overview of this loan request. The property has been placarded by Code Enforcement. The person applying for the loan is purchasing the property from the owner and it is her plan is to rehab the building and provide better housing stock. This is a good project and will eliminate a blighted, placarded property. Councilor Blanchette asked how long it had been placarded. Wallace indicated 2-3 months. Councilor Nealley said this is a prime example of use of these funds to prevent issues from affecting a neighborhood. Councilor Civiello questioned the ability to pay back the loan. Wallace explained that this is considered an investment property and they have to provide a pro forma for a year and a 15% vacancy rate was also used in the calculations. All the numbers have been run using conservative projections and the applicant checks out. Councilor Civiello asked if she has been a landlord before. Wallace replied that we do not know. Councilor Baldacci moved to approve the loan as presented by staff. Councilor Nealley seconded the motion. All in favor, motion carried. 3. Quarry Discussion Norm Heitmann explained that the moratorium has been passed by the Council with a goal to have something to bring back to them in June. He explained that the items that Staff was proposed at a previous meeting were the overlay district and setbacks with operational standards. With setbacks we could have no quarries. Currently quarries could be allowed now in Rural Residence and Agricultural districts with large enough parcels. With an overlay district quarries could only go in certain areas and people could pick where to live in that zone knowing where the quarries could potential go. 3 With setbacks and operations we could be stricter with larger setbacks and limit the hours of operation. The question for tonight is what do you want to pursue and then we will fine tune that and bring back for consideration. We will also conduct meetings to explore the options and get input from the residents and the quarry operators on what they think. Dave Gould explained that at the last discussion it was questioned how we would propose developing an overlay district without certainty that there is material there. That information was found and put on the map and it does not have definitive sources. He reviewed several different maps and there is no bedrock and the overlay area is not bearing lots of surface rock. However, Union Street also shows no rock but there is rock there and a quarry. In a lot of areas they will get to bedrock it is just a matter of how far you need to go down before you hit it. Councilor Baldacci asked if staff was just asking for authorization to have the tools to have the necessary discussions. He asked if Staff had consulted with a U-Maine Geology Professor or someone with that type of background. Gould indicated that he did not. Councilor Baldacci indicated that there are two factors that they are weighing. One is the concern for the homeowners regarding their proximity to quarries; and, two is if there is enough material in the areas that we designate in the overlay district. Councilor Baldacci indicated that he felt that they need to go back and investigate further. Councilor Baldacci felt that it makes sense to have the tools necessary to have the discussion regarding the overlay district with setbacks and time and manner of operations for existing and new quarries. He indicated that he would support authorizing the tools to get public comments and feedback. Gould indicated that he believes the overlay district, the setback and the hours of operation all need to be integrated. He understands the issues around fuel costs and transportation but there is also an effect on value of property that we need to consider as well. He said that there needs to be a balance between the livability of the residence with the needs of a business. Chair Sprague asked how an overlay would affect current owners. Gould explained that was how we calculated the overlay district to accommodate to a certain extent. He explained that the vast overlay of land will disappear as housing subdivisions and lots continue to grow and expand. The direction of the Committee is to use tools under the lens of an overlay district and continue communication with quarry owners and residents and bring it back to the committee. Nancy Cravitz spoke to reiterate her approval of the overlay proposal. She does not agree that the city should be consulting with geologists to search for quarry materials. We do not do that for any other areas. The City doesn’t look at the quality of farm land before a farmer buys it. This sounds like a special consideration for quarries and it isn’t appropriate. She thanked the Committee for the time given to assist with this issue. 4 4. Executive Session – Economic Development – Amending Development Agreement Councilor Baldacci moved to go into Executive Session under 1 M.R.S.A. §405(6)(C) at 5:50 pm. Councilor Nealley seconded the motion. All in favor, motion carried. Councilor Baldacci moved to go out of Executive Session at 5:51pm. Ben seconded the motion. All in favor, motion carried. 5. Committee Action on Above Item Councilor Baldacci moved staff recommendation to extend the length of the development agreement to add two more years. Chair Sprague seconded the motion. All in favor, motion carried. 6. Executive Session – Economic Development - Discussion of Amendment to Lease Councilor Baldacci moved to go into Executive Session under 1 M.R.S.A. §405(6)(C) at 5:52 pm. Chair Sprague seconded the motion. All in favor, motion carried. Councilor Baldacci moved to go out of Executive Session at 5:54pm. Chair Sprague seconded the motion. All in favor, motion carried. 7. Committee Action on Above Item Councilor Baldacci moved to approve recommendation as outlined. Councilor Nealley seconded the motion. All in favor, motion carried. 8. Executive Session – Economic Development – Disposition of Propery Councilor Baldacci moved to go into Executive Session under 1 M.R.S.A. §405(6)(C) at 5:55 pm. Chair Sprague seconded the motion. All in favor, motion carried. Councilor Baldacci moved to go out of Executive Session at 6:10 pm. Councilor Nealley seconded the motion. All in favor, motion carried. There being no further items for discussion, the meeting was adjourned at 6:10 pm.